Factoring the record pace of Boeing’s distortions on durable goods, the series has picked up in the past two months after major and large upward revisions to June’s estimates. The increase in growth encompasses nearly all of the subsegments, as new orders and shipments for both durable goods (ex transportation) and nondefense capital goods (ex aircraft) increased measurably over July [...]
I normally do everything I can to avoid sentiment surveys, like the Chicago PMI (the Chicago Business Barometer to be specific), because they really are misleading without exact context. However, any large move like the one in July should bring at least some interest since outlier events are often the most informative. What may be important is not necessarily the [...]
The durable goods report has become one of the most boring and uninteresting of all the major data series. There has been little change in the pace of growth, as these segments are clearly stuck in the rut that seemingly captured everything in the middle of 2012. While there is growth, it is nothing like what we should see in [...]
With the pressure on for the economy to deliver a robust rebound in the current quarter just to maintain even the semblance of hope for 2014, the latest durable and capital goods estimates are unwelcome. Various sentiment surveys show extremely robust index levels, but such mathematical constructions tell us absolutely nothing about the absolutel level of attainment, measuring only relative [...]
The cyclical change from sustained growth toward recession impacts a broad section of the economic system, but does so in different ways. Consumers grow more cautious as income growth fades and price signals get confusing and less consistent. For businesses, the proclivity to expand production capabilities is scaled back to something more like just replacement levels. Instead of adding new [...]
All economics and finance can be dissolved and distilled into analysis of patterns. Whether that takes the form of a hardened, quantitative approach or something more toward the “eye of the beholder” depends on many factors. I find it useful to blend the two to find compliments and, perhaps more importantly, divergences. Oftentimes the real trick is discerning when one [...]
There was not much new to report in today’s durable goods estimates, consisting of largely the same we have seen since mid-2012. But that in and of itself is noteworthy, particularly as other indications point to similar patterns and analysis. In the past this has been called “scraping along the bottom”, but if recent history is any guide then it [...]
Slowly the optimism fades as last year’s spurt of activity is recognized for what it was: temporary. It is entirely common for such ebbs and flows to take place in inventory approaching recessions, as businesses themselves experience extremes in expectations in light of both hope and reality. Last year was, I must say, a bit unique in that spread between [...]
When you don’t sell everything in your store, you tend not to order a lot of additional inventory. The advance look at December’s durable goods was completely unsurprising in that regard. In fact, it only reinforces other elements of the inventory mini-cycle that have appeared recently, including the sub-50 China PMI. Despite attempts to spin otherwise, retailers overdid their optimism [...]
Although there is correlation and relation between the consumer environment and business spending, there are times when the two diverge. Typically, this might occur at the outset of actual recovery where businesses invest productively first, which then leads to increases in overall employment, wages and incomes; thus bringing consumer spending up after some lag. With consumer spending heading lower, consistent [...]
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